Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.

Saturday, March 26, 2016

Thieving Lawyer Gets Three Year Stay In NJ State Prison For Embezzling Client's R/E Closing Proceeds, Fails To Raise $127K In Upfront Victim Restitution Necessary To 'Buy Down' Incarceration To One Year In County Cage; Among Shameless Attorney's Parting Words To Incredulous Judge: "I Personally Have Not Gained From Anything I Have Done"

In Morristown, New Jersey, the Daily Record reports:

A now-disbarred lawyer who claimed he used $123,495 in client funds to support his two daughters was sentenced [] to three years in prison on his guilty pleas to theft, practicing law without a license, and writing bad checks.

"I personally have not gained from anything I have done," defendant Neil Lawrence Gross, 47, of Livingston, told a disbelieving Superior Court Judge Stephen Taylor in Morristown. "I have daughters and actually everything I do, I do for them."

***

Gross pleaded guilty in December to three charges: unauthorized practice of law, writing bad checks and theft of $123,495 from a female client's estate that was siphoned between Oct. 21, 2013 and Oct. 21, 2014 by Gross issuing 30 checks to himself off the client's funds held in his attorney trust account.

The judge had actually postponed sentencing Gross a few times to give him a chance to borrow restitution from relatives. His last attempt to borrow money from relatives in Florida over the past week was not successful. Restitution was vital to his case in that Morris County Assistant Prosecutor Michael Rappa had recommended that Gross be sentenced to 364 days in the Morris County jail if he made restitution but three years in state prison if he couldn't come up with the money.

The judge Friday sentenced Gross to three years' prison and total restitution of $127,583. He will be eligible for parole after serving about nine months behind bars. The bulk of the restitution is due to the estate but he also owes Hudson City Savings Bank $3,366 for the bad checks he wrote, and $722 to the state Lawyers Fund for Client Protection.(1) While practicing law with a suspended license -- before his disbarment -- he had over-billed a "client" who was compensated by the lawyers fund.

***

In the summer of 2015, the Prosecutor's Office received a referral of a theft from the New Jersey Lawyers' Fund for Client Protection. Through an investigation by the Prosecutor's Office's Financial Crimes Unit, Gross was found to have used the name of another attorney in a real estate closing that occurred in 2013, while he was suspended.

Gross, while suspended from practicing law, held $150,000 in a trust account as part of the closing on a property in 2013, but he didn't distribute those funds to the property seller. Instead, he diverted the funds to a personal account while forging the name of another attorney, Knapp has said.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.

There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.

This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)

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